The past performance of any digital token is not a guarantee that the future results will turn out the same. However, when history repeats itself often, it becomes difficult to ignore what such price positions imply. This is easily the case with the Ethereum (ETH) price chart. The Ether price (Ethereum’s native cryptocurrency) is starting to mimic the structure of the Bitcoin price from 4 years ago.
Ethereum (ETH) Price Today – ETH / USD
Ether Mimicking Bitcoin’s Bear Market Bottom from 2015
An analysis of the Ethereum price movement since September last year indicates that the price action of the second largest digital currency by market value has been mimicking the market structure of the Bitcoin (BTC) bear market bottom from 2015. In cryptocurrency technical analysis and trading, a situation where a similar or repetitive market structure is known as fractals, which actually similar to the patterns that are recurrent in art, mathematics and nature.
Normally two emotions including fear and greed are the protocols that drive cryptocurrency price action. Hence, repeated investor behavior which goes on to yield similar results might not be far-fetched, particularly when such emotions create fractals in the digital asset market.
BTC/USD vs ETH/BTC Similarities
The chart in comparison depicts the eerie fractal indicating BTC’s bottom from 2015 repeating on the ETH/BTC chart. However, the price action of both charts is closely identical with only a few differences.
As observed, going from the left to right positions, both digital assets formed a “V” shaped bottom, which is followed by a minor rally before a subsequent bearish breakdown of the trendline. After the trendline breakdown, both markets endured an abnormal period of low volatility. Dull market periods should never be shorted because periods like this have been found to be when the markets accumulate energy before advancing significantly.
Larger players typically tend to lose interest when the markets are boring, leaving only smaller retail traders who, largely, favor long positions over short ones and in turn build a market that will favor the bulls. After the dull market, both tokens produced a minor rally, which is followed by a sell-off, as shown by the downward blue curved lines on both charts. Both assets quickly rebounded forming a curved bottom fashion, and driving the price action to a “V” shaped top, followed by the bullish continuation from the former rebound.
What are the Differences?
The similarities are striking, yet there are differences between both sides that might impact the way the fractal will actually play out. According to Richard D. Wyckoff a stock market legend, price charts typically abide by the law of “cause and effect.” Meaning, the longer this trend stays sideways (the cause), the stronger and more long-lasting the subsequent pattern will be (the effect) which another reason why shorting a dull market could be a risky proposition.
In this context, the present activity is essential because the cause for the 2015 Bitcoin (BTC) bottom lasted for nearly a year. While that of Ethereum (ETH) is just over three months, considering this, it is safe to say that a long-term upward movement wouldn’t be likely if ETH/BTC keeps on advancing because the cause is considerably smaller compared to that of BTC although a bullish effect is still a possibility. Perhaps one that will be more proportional to the 3-month cause in Ethereum’s case.